The need for investors here and overseas to manage risks and calibrate their exposure to Asia has sent growth surging in the local derivatives market.
The volume of derivatives traded on the Singapore Exchange (SGX) hit 24.2 million contracts last month, up 46 per cent year on year.
There were also broad-based declines across most Asian equity indices amid the market uncertainty, the SGX noted yesterday.
The daily average traded value of securities fell to $1.1 billion last month, down 18 per cent from the same period last year.
Market turnover value of structured warrants and daily leverage certificates also slumped 42 per cent year on year to $814 million.
But the total securities market turnover value last month rose 5 per cent from April to $23.1 billion.
The SGX noted that the United States-China trade war had roiled global markets and reduced investor tolerance for uncertainty, prompting investors with exposure to Asian asset classes - particularly currency and equity - to manage their risk exposures on the local bourse.
Trading volumes of SGX FTSE China A50 Index futures spiked 82 per cent year on year last month, while the SGX MSCI Taiwan Index futures rose 28 per cent. The SGX Nikkei 225 Index futures increased 36 per cent from a year earlier.
The SGX MSCI Singapore Index futures also saw record numbers last month, with more than one million contracts traded for the first time.
Due to the trade war, con-cerns about iron ore supply and demand ran high.
Volumes of SGX iron ore derivatives surged 87 per cent from a year earlier to 1.9 million contracts traded last month. Freight derivatives volumes grew by 54 per cent.
The overall SGX commodity derivatives volume increased by 78 per cent year on year to more than 2.2 million contracts.
Meanwhile, market volatility meant that defensive sectors such as communication services, real estate investment trusts (Reits) and consumer staples were the top net buy sectors for institutional investors last month. Only two sectors had total positive returns - communication services at 0.6 per cent and Reits at 0.4 per cent.
Total share buybacks for the month hit a nine-month high of $123.1 million.
IT was the best-performing sector in the first five months of this year, generating 18.2 per cent in total returns, followed by Reits with 13.9 per cent, utilities with 12.5 per cent and consumer staples with 10.3 per cent.
Fundraising activities were high, with four equity listings raising close to $1.5 billion, the SGX said.
Eagle Hospitality Trust and ARA US Hospitality Trust were the third-and fifth-largest initial public offerings in Asia ex-Japan for the year so far, according to financial services platform Dealogic.
